Don’t fear the migrant. Tim Harford

Should we seek to keep the citizens of poor nations trapped in their countries of birth for the good of their fellow citizens? Nobody would, for a moment, consider banning ambitious Mancunians or Glaswegians from working in London, purely on the principle that they might do more good in their back home. Outrageous infringements of liberty seem to be acceptable only when applied to foreigners. (Another analogy, inspired by Clemens: would we happily discuss working mothers under the heading of “the love drain”? I hope not.)

The real effects of the brain drain have also been poorly thought through by most of us. The economist Oded Stark points out that if western countries assiduously recruit doctors and engineers from poor countries on comparatively vast salaries, that is a strong incentive to train as a doctor or engineer. The result may be more doctors and engineers in poor countries, even after the migrants have left. And there is some evidence that this is indeed the case. (Robert Guest, the author of a forthcoming book on international migration, points out more nurses leave the Philippines each year than any other country, and yet the Philippines retain more nurses per head than Austria.)

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(Vía Francisco Capella)

Green lights for red-light districts. Tim Harford

Read article.

Extracts:

Perhaps we should not be surprised that when a large number of people drop into town, many of them men, local sex workers see an opportunity to do business. Tourists worry less about being spotted by a neighbour or a colleague. And to the extent that some men may be weighing up the relative attractions of paying for sex versus looking for a wife or girlfriend, being in a city far from home makes looking for a girlfriend relatively less tempting.

It may seem alarmingly cold to view men as weighing up the costs and the benefits of finding a wife versus hiring a prostitute – and just as stark to view women as making the same decision in reverse – but the idea is not mine.

Almost a decade ago, two economists, Lena Edlund of Columbia University and Evelyn Korn of the University of Marburg, published an article, “A Theory of Prostitution” (PDF), which modelled exactly these decisions. One of their purposes was to explain why sex workers can earn so much money. The abstract begins with a puzzle: “Prostitution is low-skill, labour intensive, female and well paid.” The economists suggested a “marriage market explanation” as the reason why. If marriage can provide women with an important source of income, “it follows that prostitution must pay better than other jobs to compensate for the opportunity cost of forgone marriage market earnings”.

Vía Francisco Capella.

Tim Harford: Trial, error and the God complex

Via Cafe Hayek.

Construir una escuela en África por Ignacio Moncada‏

Tim Harford contaba en El economista camuflado un gráfico ejemplo de por qué la ayuda externa no permite que África se desarrolle. En Camerún, país centroafricano devastado por un gobierno totalitario, el autor visitó una moderna biblioteca construida gracias a un programa de ayuda occidental. La biblioteca era una especie de versión reducida de la Ópera de Sidney en la que no habían reparado en gastos. Sin embargo, cuando entró en el edificio descubrió que, pese a tener tan sólo un par de años, la biblioteca estaba arruinada. Las fuertes lluvias la habían inundado tantas veces que más bien parecía un invernadero ecuatorial. Ni rastro de libros, ni por supuesto de lectores, sólo vegetación. La biblioteca estaba abandonada. Pese a que el edificio fuese espectacular el día de su inauguración, las organizaciones occidentales que hicieron el esfuerzo de construirla para fomentar la lectura no cayeron en la cuenta de que para construir una biblioteca no vale con levantar un edificio. Es necesario, sobre todo, que tenga un propietario.

Este ejemplo me traía a la cabeza el vano empeño con el que tantas organizaciones y ejércitos occidentales presumen de construir escuelas en África u Oriente Medio. Se limitan a erigir un edificio, en ocasiones vistoso, y ponen "colegio" en el cartel de la entrada. Pero para que los locales puedan disfrutar de una escuela, el edificio es lo de menos. El verdadero cimiento para implantar un buen colegio, o universidad, es generar la confianza suficiente a los padres de que si llevan a sus hijos, diez años después saldrán con una formación adecuada. La educación siempre es una inversión a largo plazo a cambio de un intangible, aunque nuestro subconsciente tienda a relacionar el servicio de la enseñanza con el edificio. Para que se cumpla esto es necesaria, como en casi todos los problemas de desarrollo, la propiedad privada. Y para ello unas instituciones que la respeten y la protejan, no que la ataquen.

La receta puede parecer sencilla, pero es enormemente complicada de aplicar. Para construir una escuela es necesario que alguien esté dispuesto a gastar dinero anualmente para pagar a buenos profesores. Que sea capaz de atraer a los padres y convencerles con un buen servicio. Y sólo alguien que tenga que vivir de gestionar adecuadamente una escuela podrá garantizar una formación eficaz para los lugareños. Un gobierno que no respeta la propiedad privada como el de Camerún, o tantos otros, bloqueará la educación de su país. Este problema que los occidentales tienden a infravalorar, cuando no a negar, es la mayor causa de pobreza en el mundo. Preferimos seguir distrayéndonos gastando dinero en construir bibliotecas, escuelas y hospitales, sin caer en la cuenta de que no funcionarán. Aunque sea tan absurdo como pensar que para tener una universidad de la calidad de la de Harvard, basta con replicar sus edificios.

Ignacio Moncada es ingeniero industrial por ICAI y trabaja en la gestión de proyectos energéticos internacionales.

Why we have got our work cut out creating jobs that matter by Tim Harford

My wife and I only argue about the big issues, such as whether it’s a good idea for her to leave utensils in the sink. For the record, clearly not: it means that coffee-filter cones and colanders which need nothing more than a quick rinse are infected with deposits of grease from other dishes. My wife is simply creating work.

The other day, as I was running a sink of hot, soapy water in order to clean a coffee-filter cone, I mused on an inconsistency: we celebrate creating jobs in the wider economy, but complain bitterly about creating them around the house.

We can see the obsession with creating jobs everywhere in public discourse. It seems to be easier to sell renewable energy subsidies through the idea that it will create jobs than the suggestion that it might slow climate change. The coalition’s plans to cut public spending appear to me to be more unpopular on the grounds of lost jobs than lost services. International trade – and before it, new technology, which from an economist’s viewpoint looks much the same – is also condemned because it destroys jobs.

There is much that is silly about all this, and we should pay more attention to the kitchen-sink insight that it’s not a great idea to create needless work. Even if I was inclined to hire a cleaner to wash pointlessly dirty dishes, the apparent job-creation is illusory. The money I felt forced to spend on a cleaner I might instead have spent on a night out, employing cooks and waiters. And even if I had saved it, it would have swollen the pool of savings and made it cheaper for someone to borrow money and set up a business.

Economic growth is a continual process of job destruction. Start with agriculture, which destroyed the jobs of hunter-gatherers, and keep going until you get to e-mail, mobile phones and the word processor, which have destroyed the jobs of secretaries. Historically, some of the people whose jobs have vanished find something more useful to do than the grinding task of finding enough calories: teaching, practising medicine or learning engineering.

In principle, increasing labour productivity (aka “destroying jobs”) could lead to us doing less work for the same material gains. This could be pleasant – welcome to the five-hour working week – or horrible, with an employed elite and an unemployed and marginalised majority. In fact, to the bafflement of yesteryear’s futurologists, we do not lead lives of leisure while robots handle every chore. Instead, we have chosen to enjoy the benefits of greater labour productivity as greater wealth. (We do enjoy more free time too: longer holidays, shorter hours and working lives which start later and finish earlier despite a longer overall lifespan. But we take far less leisure time than we might.)

All that said, there are circumstances in which make-work schemes might make sense. One is the situation in which we find ourselves: a weak economic climate in which public sector job cuts could depress the private sector too. The coalition has a decent argument for making cuts: tax rises would also depress the private sector, while continued borrowing is unsustainable. But the idea that the cuts themselves will help create private-sector jobs is nonsense.

And what of areas whose economies have persistently struggled to recover from the death of an industry? A simplistic economic model suggests that wages will fall, private sector companies will rush in, and growth will resume. Reality suggests a grimmer diagnosis, but not one for which either the left or the right has produced a cure. What is needed are jobs that matter. We don’t yet have a reliable recipe for creating them.